SC judge halts Santee Cooper lawsuit proceedings pending $520 million settlement

The South Carolina judge in the massive class action ratepayer lawsuit against the state’s public utility Santee Cooper has halted proceedings in the case pending a likely $520 million settlement agreement.

Major defendants in the case including Santee Cooper and what was formerly known as SCE&G — now Dominion Energy — have tentatively agreed to pay $520 million to ratepayers, according to a five-page tentative agreement obtained by The State.

The case had centered on whether and how much money Santee Cooper, an 85-year-old state agency, should refund to 2.2 million ratepayers who were charged extra each month for years to pay some $2 billion for the costly failure of the V.C. Summer nuclear power project that was never completed in Fairfield County.

Santee Cooper was the junior partner on the project with the now former Cayce-based SCE&G and SCANA. Santee Cooper paid for 45% of the project and SCE&G paid 55%. SCANA and SCE&G were acquired by Dominion Energy last year.

In July 2017, after spending billions on the project, Santee Cooper and SCE&G abruptly announced their nuclear construction project had failed and they were abandoning it.

Under the preliminary agreement, Dominion will pay $320 million in cash or marketable securities and Santee Cooper will pay $200 million in three annual installments in amounts of $65 million, $65 million and $70 million.

Other parts of the preliminary agreement include:

▪ Santee Cooper agrees to a rate freeze with several exceptions, including a cyber security attack or a hurricane.

▪ Dominion Energy agrees not to charge its 700,000-plus customers in South Carolina for any money it puts up to settle the class action lawsuit.

▪ Fees for the plaintiffs’ lawyers have not yet been determined, but attorneys agree not to seek more than 15% of the $520 million settlement, or $78 million. However, Toal must sign off on any fee awards.

In an order, Toal wrote there is still work to do before the settlement is finalized.

The deal’s terms “must be memorialized in a settlement agreement ... and the final settlement agreement will be subject to court approval,” Toal wrote in an order filed late last week at the Greenville County courthouse.

In late January, Toal set April 20 as the start date for what was expected to be one of the highest stakes jury trials in state history — deciding whether Santee Cooper should make what were estimated to be hundreds of millions of dollars in refunds to to its customers.

Toal is a retired S.C. Supreme Court chief justice assigned to the case.

Over the years, Santee Cooper increased its electricity rates five times to pay for construction and other costs associated with the doomed nuclear project. In all, Santee Cooper spent some $4.7 billion on the failed project.

The nuclear project’s failure spawned more than 20 lawsuits and left both Santee Cooper and SCE&G facing massive debts. Dominion acquired SCE&G, a once-financially healthy investor-owned utility and one of the state’s biggest corporations.

The state Legislature is now trying to decide whether to sell Santee Cooper, reform itself or sell it off to NextEra Energy, a giant multi-state utility from Florida that wants to buy the state agency.